German study: air travel taxes are an important instrument for climate protection

Date added: December 2, 2013

A study in Germany has been commissioned by a range of development and environmental organisations, into the effects of taxing aviation. It found that charging some taxes to air travel does not lead to movement of passengers from German airports to use foreign airports or to job losses in the aviation business – which is what he Federation of German aviation industry claims, probably incorrectly. The report says that additional revenue should be generated from air travel, to help fund mitigation and adaptation to climate change in developing countries. The organisations are calling on the coalition government in Germany to keep, and increase, air travel tax. The tax started in January 2011, and is charged based on distance travelled with rates of €7.56, €23.62, or €42.52 for short, medium and long haul flights. In Germany, as in the UK and in most of Europe, jet fuel is exempted from the energy tax on international flights and VAT is not charged. This tax break amounts annually to about €10.4 billion euros lost to the German tax authorities, which is massively more than the approximately €1 billion from air travel tax currently paid. The report wants to see taxation incentivise the most efficient utilization of planes. .Tweet

Study: air traffic control important instrument for climate protection

20.11.2013 (Handel.de – Germany)

[Imperfect translation into English below].

The air traffic control does not lead to migration of passengers at foreign airports or to job losses in the aviation business as the Federation of German aviation industry claims. In order to develop an ecological steering effect and to generate additional revenue for the financing of climate change in developing countries, the air traffic control would have to be expanded.

These are the key findings of a study that was today (11/20/2013) presented in Congress in Berlin.

The study was supported and commissioned by Bread for the World, Association for the Environment and Nature Conservation Germany (BUND), Greenpeace, Robin Wood, the organic traffic Club (VCD) and Forum Ecological-Social Market Economy (GBG).

From the perspective of environmental and development organizations the continuing criticism of the aviation industry on their control is thus refuted. Given the ongoing coalition negotiations are therefore calling for organizations strongly supported the preservation and the development of air traffic control.

The environmental and development organizations emphasize that the first since the January 2011 levied in Germany charge based on distance is so far the only effective control tool for klimaschädlichsten transport.

Since jet fuel is exempted from the energy tax on international flights and VAT is not charged, annually about €10.4 billion euros escape the German tax authorities. Compared to these harmful subsidies of air travel however, the cost of air traffic control is just under one billion euros per year.

Therefore, the groups are calling on the CDU / CSU and SPD to maintain the air traffic control system and continue to develop it.

While it already makes a contribution to the reduction of environmentally harmful subsidies of air travel, a higher tax rate could also increase their ecological steering effect. Furthermore, additional tax revenue generated could be used to assist in the financing of mitigation and adaptation to climate change in developing countries.

In their model, the tax is not levied on seats, but on the whole plane, and differentiated by booking classes. This will see the organizations an extra incentive for the efficient utilization of the planes, with high load factors.

The polluter pays principle must also apply to aviation: passengers who take up much space [premium classes] and thus consume more fuel, should pay more. The use of the tax revenue for climate finance in developing countries constitutes a contribution to global justice.

Finally, most people suffer in the countries of the global South from the consequences of climate change – many of whom have never even flown.

The complete study “The air traffic control. Impact on the development of aviation in Germany.” You find here .

“At the start of 2013 Germany froze its air passenger tax after the German federal Government published a study on the economic effects of the tax, concluding that two million passengers didn’t travel in 2011 due to the higher air fares” according to http://www.afairtaxonflying.org/facts/

Germany may abolish national air travel tax

Fri, 22 November 2013

A possible end to the air travel tax in Germany may have potential benefits for German airlines, according to a report in German tabloid Bild cited by Credit Suisse analysts on Friday.

German government coalition parties are said to be in negotiations to abolish the national air travel tax. Introduced in 2011 it generates approximately €1bn in revenues for the country.

Lufthansa and Air Berlin, as well as federal states including Bavaria, have lobbied against the tax and a potential abolishment would prove a significant positive for air travel demand in Germany, the report claims.

“The result of government negotiations remains to be seen, but we highlight the potential benefit to Lufthansa in the meantime,” Credit Suisse said.

Germany To Lower Plane Ticket Tax

by Ulrika Lomas, Tax-News.com, Brussels 12 October 2011 Germany’s highly controversial plane ticket tax is to be lowered next year to compensate for additional costs arising from the extension of the European Union’s (EU) emissions trading scheme to flights over Europe from January 1, according to the German finance ministry. [The ETS has now virtually collapsed, and even where it works, the cost of carbon permits, at around €5 per tonne, is so low as to barely add any additional cost to flights. AW comment].

From the beginning of 2012, passengers will be faced with additional costs on international flights as the European Union’s right to impose carbon levies on all commercial flights using European airports was recently deemed by the European Court of Justice to be “compatible” with international law.

In accordance with the European emissions trading scheme directive, airlines operating into and out of the EU will from 2012 be required to surrender varying emission allowances, depending on the flight, and will be required to purchase any additional permits outside of their free allowance.

As a result of the new provisions, experts have calculated that passengers on long-haul flights may be faced with additional costs of between €2 to €12 a ticket.

Germany’s airline ticket tax, which entered into force from January 1, 2011, is currently levied at a rate of €8, €25 or €45 per passenger, depending on the destination.

A draft bill drawn up by the German finance ministry provides for a 5.52% reduction in the levy across the board, which would effectively lower the rates to €7.56, €23.62, or €42.52 respectively.

Concerned that they will be unable to sustain their cheap tariffs and that they will continue to lose passengers as a result, low-cost airlines have criticized the government’s proposed model, arguing that budget flights are disadvantaged under the current plans.

Despite an overall increase in recorded passenger numbers at airports in Germany in the first half of the year, low-cost and domestic flights have been significantly affected by the coalition government’s plane ticket tax.

In its release back in July, the German airport association ADV revealed that although the number of passengers at German airports rose by 8.1% in the first six months of 2011, despite turmoil in the Middle East and North Africa, high oil prices and the effects of the volcanic ash cloud, developments at individual airports in Germany varied considerably.

ADV emphasized at the time that the effects of the plane ticket tax are becoming increasingly visible. Indeed, airports with a high proportion of low-cost and domestic flights have shown a significant decline in passenger numbers, the association revealed.

Warning of potential job losses in Germany, chief executive of ADV Ralph Beisel explained that the levy has led to a dramatic decline in passenger numbers in some airports in Germany. Beisel emphasized that airports in bordering states, including the Netherlands, have greatly benefited from the tax, revelling in increased numbers of new passengers.

According to ADV, low-cost travel declined by 0.8% in the first half of 2011, while sustained declines were observed particularly in the case of low-cost domestic flights, which in some cases fell by 22.6%. In stark contrast, ADV analysis revealed that numbers significantly increased at bordering airports in the same time period (for example numbers rose by 29.7% at Eindhoven airport and by 71.8% at Maastricht airport, both located across the German border in the Netherlands). Germany’s plane ticket tax represents a clear location disadvantage compared to bordering foreign airports, the analysis showed.

German airlines fiercely opposed and criticized the government’s plans from the outset, warning of competitive disadvantages for the country’s industry and arguing that passengers in border areas would merely fly from airports abroad.

The German government is due to re-examine its airline ticket tax and the effects of the levy next year [2012], and is expected to present its findings to the German parliament or Bundestag at the end of June.